The July/August online edition of The Economist (read here) has a very interesting article on the rise of data (or ‘evidence’) and the potential demise of the ‘hunch’. Using stores from the world of music and sporting talent scouts, the article makes the compelling case that rational, evidence-based, data-supported decisions have a much greater chance of success than relying on your’ hunch’, drawn from your experience.
The success of movies like ‘Moneyball’ supports this position and numerous academic studies have long since proven that interviewing job applicants is a recipe for disaster. In fact, academic studies no longer study whether interviews are an effective way of selecting applicants, because the evidence is too overwhelming against such an idea. Instead, the studies are now about why people continue to use such a flawed approach to a major business decision.
So in raising the question as to whether there is still any place for the unmeasurable ‘hunch’ the article provides a number of situations in sports, music and business where there are skills that are unmeasurable and do still require a judgement based on intuition. These skills include things like the ability to quickly respond to an unplanned event and reconvert a pre-existing idea into a new reality instantaneously. Also, to improvise, and succeed. And in business in particular, to foster and maintain relationships, which forms the essence of what enables things to get done.
The article concludes that while the growth of data analysis had provided an opportunity for better decision-making, not all decisions can be based on data, or evidence, alone. In fact, each can often support the other. In leadership, the skill is to discern the time for each.
The Avondale Business School can advise your organisation on being effective in these areas – find out how by contacting Warrick Long at the Avondale Business School.
P: 02 4980 2168